Oil regains ground due to political uncertainty in US, Middle East | Business

Ammon News – Oil regained ground on Monday, with political uncertainty in the US and the Middle East supporting prices, offsetting downward pressure from a stronger dollar and weak demand in top importer China.

Brent crude futures were up 15 cents, or 0.2 percent, at $85.18 a barrel by 0425 GMT, after falling 37 cents on Friday. U.S. West Texas Intermediate crude was at $82.41 a barrel, up 20 cents, or 0.2 percent.

Oil prices shrugged off the impact of the dollar, which strengthened after a failed assassination bid against US candidate Donald Trump.

“I don’t think you can ignore the uncertainty that this weekend’s assassination attempt will throw into a deeply divided country in the run-up to the election,” said IG market analyst Tony Sycamore.

In the Middle East, talks on ending the Gaza conflict between Israel and Hamas stalled on Saturday after three days, although a Hamas official said the next day that it had not withdrawn from the talks.

However, an Israeli attack targeting the group’s military leader killed 90 people on Saturday.

Uncertainty surrounding the volatile situation has kept oil’s geopolitical premium high.

Oil markets are also heavily supported by supply cuts from OPEC+, with Iraq’s oil ministry saying it will offset any overproduction from early 2024.

Brent fell more than 1.7 percent last week after four weeks of gains, while WTI futures fell 1.1 percent as a drop in crude imports from China, the world’s biggest importer, countered robust summer consumption in the United States.

“While fundamentals are still supportive, there are growing demand concerns, largely coming from China,” ING analysts led by Warren Patterson said in a note.

China’s crude imports fell 2.3 percent in the first half of this year to 11.05 million barrels per day amid disappointing demand for the fuel and as independent refiners cut output due to thin profit margins .

Crude output at Chinese refiners fell 3.7 percent in June from a year earlier to 14.19 million bpd, the lowest level for the year so far, customs data showed on Monday.

China’s economy slowed in the second quarter as a prolonged slump in property and job insecurity weighed on domestic demand, keeping alive expectations that Beijing will need to unleash more stimulus.

In the United States, the number of active oil rigs, an early indicator of future production, fell by one to 478 last week, the lowest since December 2021, energy services firm Baker Hughes ( BKR.O ) said on Friday.

Reuters